New retail democracy: prioritising the provision of commerce anywhere
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New retail democracy: prioritising the provision of commerce anywhere



The New Retail Democracy research commissioned in December 2013 builds on recent surveys, which highlighted consumers’ views of the global retail landscape and whether retailers were meeting their ...

The New Retail Democracy research commissioned in December 2013 builds on recent surveys, which highlighted consumers’ views of the global retail landscape and whether retailers were meeting their needs.

The current research interviewed 4,500 adult consumers from Brazil, China, France, Germany, Japan, Russia, South Korea, the UK and USA on their shopping experiences, habits and opinions.

Specific topics in the New Retail Democracy research included:

• Consumer use of multiple touch points for shopping
• Value and benefits technology delivers to the shopping process
• Value of information within the shopping process
• Importance of individualisation to the consumer
• Understanding consumer opinions of their interactions with retailers
• Positive and negative drivers in purchasing decisions
• Growing trend of retail disintermediation and the brand opportunity



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New retail democracy: prioritising the provision of commerce anywhere New retail democracy: prioritising the provision of commerce anywhere Document Transcript

  • The New Retail Democracy: Prioritising the Provision of Commerce Anywhere
  • Page 2 INTRODUCTION A new democratic relationship between consumer and retailer is emerging. The single biggest challenge for retailers today is to understand, empower and represent the new digitally- empowered consumer operating across all touch points. The retail power dynamic of the past was arguably more predictable and static. To create relevant representation for today’s consumer, retailers still need to be consistently and powerfully seductive but they also need to have better, more open communication where quality information and knowledge is shared between both parties. The consumer has never held more power and it is harder than ever for retailers to platform their businesses to capture customer loyalty. In the consumer’s eyes, the new retail democracy is both attractive and convenient with relevant, trustworthy and reliably available product at its core. To deliver democratic retail, a modern retailer’s priority has become the provision of commerce anywhere. It is the power of the consumer that is driving the rapidity of change within the new retail model. The role of the retailer is to align and integrate the retail business process with the needs of the individual consumer. This is how to compete and stay relevant. At the heart of this new democracy are some strong opportunities for meaningful differentiation. ACCESS NEW AREAS In the past, the consumer was completely isolated from retail operations.Yet today, they want access to many areas of a retailer’s business. This empowered consumer now wants to be their own supply chain manager, deciding where to buy, ship, pick up or return an order. This consumer is now their own merchandise operations manager, assessing ethical sourcing criteria, price considerations, delivery times and levels of stock availability across different territories and sometimes countries. This consumer now runs their own commerce, raising orders on a mobile device. If they tire of a product, they can easily become a merchant themselves, selling items on the global market place with eBay or Amazon. This consumer now is their own retail assistant, looking up product information online and evaluating which brand is right for them. This consumer now is a powerful brand marketer, engaging on social networks, reviewing products and educating their peer groups, effectively determining the success or failure of a product. In short, the balance of power between consumer and retailer has irrevocably changed and the next seismic shift in the market will see the best retailers raising their game to stay attractive and relevant in this new model. Putting barriers between the consumer and their new desire for knowledge is not a successful strategy. Retailers who do not welcome the new democracy and invest in giving their customers access, will struggle. It is time to re-platform and to grow with this more democratic vision of retail. With the consumer now involved in so many decisions from sourcing through to shipping, enabling access to the most powerful retail technology will differentiate in this environment. It is a number one priority. The New Retail Democracy: Prioritising the Provision of Commerce Anywhere
  • Page 3 EMPOWERING INDIVIDUALS ANYWHERE Of course, as the consumer secures more control over the retail process, retailers face further challenges. As an individual increasingly orchestrates their own supply chain, can retailers ensure they have an active understanding of inventory at all times and are leveraging the supply chain to fulfil requirements on demand, be that to store or direct to the consumer? How can a retailer combat the effects of brand convergence and the global market place? What can be done to better manage customer communities and support the individual? It is the job of the retailer to empower both consumers and their own people to ensure every participant can gain understanding and add value at every interaction point. So what is the role of the store in this new world? Shopping in-store remains a core human activity - offering the chance to re-connect, socialise or learn - but there is considerable opportunity to expand the role of the store into a retail attraction for the diverse community it serves. With this perspective in mind, Oracle recently conducted research into the shopping habits of consumers in Brazil, China, France, Germany, Japan, Russia, South Korea, the UK and USA. In this whitepaper, we share the survey findings and explore how retailers can meet the opportunities presented by the consumer to satisfy their demands and to develop and grow. SURVEY OVERVIEW The New Retail Democracy research commissioned in December 2013 builds on recent surveys includingThe Evolution of Experience Retailing report of January 2013, which highlighted consumers’ views of the global retail landscape and whether retailers were meeting their needs. The current research interviewed 4,500 adult consumers from Brazil, China, France, Germany, Japan, Russia, South Korea, the UK and USA on their shopping experiences, habits and opinions. Specific topics in the New Retail Democracy research included: • Consumer use of multiple touch points for shopping • Value and benefits technology delivers to the shopping process • Value of information within the shopping process • Importance of individualisation to the consumer • Understanding consumer opinions of their interactions with retailers • Positive and negative drivers in purchasing decisions • Growing trend of retail disintermediation and the brand opportunity KEY GLOBAL FINDINGS Findings from the New Retail Democracy research reveal the following: ACCESS ANYWHERE, COMMERCE ANYWHERE Consumers demand knowledge. They want to know what product is on offer, what inventory is available, in what location and at what price point. WHAT IS MOST IMPORTANT TOYOU WHEN SHOPPING? 39% 37% 13% 11% View slide
  • Page 4 They need retailers to offer access to this information in a variety of ways - in-store, online and on mobile devices. Essentially, consumers need this knowledge and they need to be able to access it and make purchases from anywhere. As expectations have risen, tolerance for failure at any point in the delivery of commerce anywhere has become paper thin. 52% of global respondents say access to product location and availability information is key to enhancing their shopping experiences. This is the first time we have asked consumers about their appetite for access and already the majority want it. We predict this is a growing majority guiding retail technology investment for brands seeking to build and retain competitive advantage. Empowering the consumer with access and commerce anywhere requires retailers to re-orchestrate their operations. To achieve this, retailers must focus on re-platforming the business on integrated modern systems that unequivocally align the consumer with the business process to accommodate and connect the customer journey - whatever and wherever that is. From the perspective of retail processes, the requirement is to connect planning, buying, merchandising, marketing and supply chain capabilities across all touch points including stores. AVAILABLE ALWAYS, COMMERCE ANYWHERE 93% of global respondents want to understand product availability in-store or online. Almost half (46%) are more likely to be loyal to a retailer that provides information on availability, while 30% are inclined to spend more money with these retailers and 18% will select another retailer that does provide visibility to availability. The correlation between availability, loyalty and spend is clear - without visibility, consumers are less inclined to be loyal or spend more money. In short, consumers will walk away when a retailer does not deliver commerce anywhere. Technology that delivers visibility to stock at the point of purchase (33%) and access to detailed product information across digital and store channels (24%) offer the most value to shoppers, although there were vast differences in the perceptions of this value across geographies. THE DIRECT CORRELATION BETWEEN AVAILABILITY, LOYALTY AND SPEND 46% 30% 18% 7% View slide
  • Page 5 Japan gave the highest rating globally to the value in stock visibility (60%) but saw little value in access to detailed product information (9%), while Brazilian results revealed the opposite (15% and 41%). Amazingly, despite price being a priority for shoppers, 58% of respondents globally say it is more important for an item to be available than be at the cheapest price, rising to 82% of respondents in China. Consumers are not patient. A staggering 92% of respondents indicated they will not wait for desired products to come into stock; the Russians being the most content to wait (14%), while Brazil and South Korea have the least patience (4%). The vast majority of consumers globally (88%) will search online or try another retailer to find the product they want, meaning retailers are likely to lose out to the competition. Upsetting 92% of the population is untenable. Availability always requires integrated demand forecasting, planning, merchandising, supply chain, marketing and commerce across all touch points. LONDON, NEWYORK, PARIS,TOKYO – ANYWHERE In the past, retailers were proud of their geographical presence and having stores in London, NewYork, Paris and Tokyo was a must for any luxury fashion brand. Now, in addition to the rapid growth of new retail geographies, the global explosion of touch points and choice are becoming a necessity for any brand. THE VALUE OF INFORMATION TOTHE SHOPPING EXPERIENCE THE IMPLICATION OF OUT-OF-STOCKSTOYOUR BUSINESS 47% 41% 8% 3% 33% 24%
  • Page 6 In the last 12 months, consumers have been exploring new ways of shopping. 53% of global respondents confirmed they had made purchases on their PC or tablet, 34% have bought in-store and used home delivery and 31% have used click and collect for the first time. 26% indicated they had bought items on their smart phone, while 13% had made a purchase through a social networking site and 10% through an online magazine. Across the world, the consumer wants to interact with the retail process in many different ways and retailers need to cater for this diversity, managing this alongside the complexity of balancing the global and local components of the retail business. In addition to the value that product availability and location information (52%) and product suggestions (34%) provide, several other technologies were also flagged as enabling a better shopping experience, particularly by the Chinese respondents, where large numbers are engaging with these solutions. The provision of services, such as click and collect identified by 25% of global respondents, mobile apps for browsing (21%) and buying online (19%), will no doubt grow in value with the growth of digital commerce, although the Japanese saw little value in these solutions currently. UNDERSTANDINGTHE DEMAND FOR COMMERCE ANYWHERE 53% 34% 31% 26% BUY BUY 13% 10% 8% BUY BUY ?
  • Page 7 There is also an increasing demand for technology to enable in-store transactions, such as payments or returns, to be conducted away from traditional point-of-sale dealing directly with store assistants utilising mobile devices. Nearly a fifth (19%) of respondents identified with this approach, while 17% value the provision of free Wi-Fi to deliver a truly multi-channel experience. THE TECHNOLOGIES CONSUMERS SEE AS A VALUE-ADD 52% 34% 25% Accurate information about the location and availability of products Suggestions about additional products I might like Click and collect facilities 21% 19% 19% BUY Mobile apps to browse online for previewing / information In store payment / returns made away from standard cashier desks, directly with the store assistant Mobile apps to buy online 17% 14% 2% ?
  • Page 8 It is also important that retailers recognise the need for integration in the delivery of these services. Almost a fifth of respondents (18%) agreed they gain the most value from technology that enables a connected shopping journey that ties channels with stores, returns and added services. 82% of global respondents consider it important for retailers to adopt new technologies to assist commerce. In Brazil, 99% agree with this, while in Germany, this figure falls to 59%. THE POWER OF INDIVIDUAL RETAIL INTHE NEW RETAIL DEMOCRACY So far we have explored how, in the new retail democracy, the individual holds more power, wanting more access (52%) and demanding better availability (92%). When retailers can deliver on these requirements via commerce anywhere, then both loyalty and spend increase. We have seen too how the newly empowered consumer expects convenience and is more easily frustrated by any perceived failure. Satisfying the requirements of the individual is a clear opportunity for brand differentiation. Findings reveal that retailers must recognise that consumers want to be treated as individuals. 73% of respondents regard it as important that a retail interaction is individual to them, particularly in Brazil and China, where only 2% of respondents considered this unimportant. However, when it comes to defining how interactions deliver value, consumers differ in their opinions of how this can best be achieved. Over a third of respondents (35%) perceived rewards based on their purchases as providing the most value, with over half of UK respondents (53%) agreeing with this statement. 18% 15% Want an integrated, connected shopping journey that ties channels, stores, returns and service Want an integrated view to track my current orders and review order history THE VALUE OF INTEGRATED INFORMATIONTOTHE SHOPPING EXPERIENCE POINTS OF VALUE INTHE RETAIL INTERACTION 35% 21% 18% Receiving rewards based on products I buy Receiving targeted promotions Product suggestions and alternatives
  • Page 9 Receiving targeted promotions was most important to the Chinese (30%) with the US also rating this value (29%). Product suggestions and interest-related content featured less highly for consumers although there were considerable geographical differences in interest for these communications. Given the diversity of these results, can retailers afford not to be able to offer tailored and targeted promotions? These findings demonstrate that retailers need to focus on providing differentiated offerings that meet individual interests and requirements to increase the value of each interaction, yet never ceasing to deliver on the requirement of availability always. Without the provision of commerce anywhere, respondents consider personalisation irrelevant. RESPECTINGTHE POWER OFTHE BRAND A further threat to the affinity between retailer and consumer is the growth in brand disintermediation. Almost half (48%) of global respondents claim they would happily buy a branded item direct from a brand. Only Russia (34%) showed disinclination to do so with the greater number (50%) choosing to purchase branded products from a retailer. In China and Germany, almost a quarter (23%) said they would consider a direct purchase if the brand was offering an additional service, like customisation. So although consumers indicated a partiality for loyalty to a retailer that enables greater access and product availability, there are no guarantees that consumers will not deal directly with a brand. Embedding access anywhere, availability always and commerce anywhere into the core of a retail brand gives it a fighting chance of competing with a factory direct model. THE GROWING INFLUENCE OF BRAND 16% 10% HI TOM Receiving content relevant to my interests Being recognised on a retailer’s website 48% 33% 19% ? Yes, I am happy to buy directly from a brand No - I like to choose branded products from a range of designers It depends if the brand offers some additional service like customisation, then I am happy to buy direct from them
  • Page 10 EMBEDDING EMPOWERMENT INYOUR BRAND Whether you are a multi-channel retailer or a pure play retailer - your brand remains a point of differentiation. The way deliveries, returns, refunds and key retail business processes are managed is part of delivering on the promise. The way you welcome customers, providing them with access anywhere, availability always and commerce anywhere will contribute to future success. Retailers with investments in physical stores need to see the best returns, both from their real estate and the investment in people within their stores. There is no doubt the interaction between retailer and consumer is becoming increasingly complex, as the balance of power and knowledge shifts away from the retailer and traditional boundaries between retailers and manufacturers blur. Combine this with the need to redefine consumer perceptions of personalisation as individualisation and it becomes obvious retailers are missing opportunities. Retailers need to utilise science-based retail analytics tools to leverage all the information they collect across platforms and touch points to better engage with consumers and deliver the right level of individual retail. EMPOWERINGTHE STORE In spite of the growth in importance of commerce anywhere, it is important to remember that the store is an integral part of the shopping experience. It continues to be the favoured touch point in most countries, for 53% of respondents globally compared to 35% who prefer to shop online. FAVOURITE WAY OF SHOPPING 53% 35% 5% Buy goods in store and take goods home Buy goods online and have goods delivered to home Buy goods online and have goods delivered to office / locker / other location 4% 4% Buy goods online and pick up in store Buy goods in store and have goods delivered to home
  • Page 11 The value in physically viewing and touching items remains important to many groups of shoppers. 60% of global respondents indicated that they would not buy an item directly from a brand if they had never seen it in a physical store. Japan (85%), South Korea (74%) and Russia (70%) agreed most strongly with this statement, while the UK and China were relatively indifferent. As part of this transformation, the role of the retail assistant must change too. While 55% admitted they spent more money when store assistants were empowered to help them, two-fifths of this figure felt consumers often had access to more information about products, pricing and availability than those helping them. In many cases, this alarming knowledge gap comes down to the mobile phone, which provides the consumer with more access and therefore, information, than the sales assistant does. This disconnect in the store is no longer tolerable. Preventing the consumer from walking away to a competitor could be as simple as providing the store assistant with the same technology. If the consumer can access the mobile site during their visit to a store, then why disenfranchise the store assistant? Why not enable them with an intelligent mobile device that mirrors the consumer journey and also manages the payment process away from the traditional point-of-sale systems? This puts the consumer and the store assistant on a more equal level. Whether your assistance is in person or virtual, the new retail democracy demands that both consumers and sales assistants have access to and are given the right knowledge that will support more positive and productive outcomes. CONCLUSION While consumers will continue to dictate how, when and where they choose to make purchases, we believe there are three key strategies retailers must focus on to achieve the provision of commerce anywhere and regain more equilibrium in the power struggle between themselves, consumers, brands and the global market place. Firstly, access. Retailers must commit to opening up their businesses to better serve the needs of their customers. As consumers are empowered to take ownership of their retail process, retailers need to loosen control over their enterprise - in terms of both process and information - and focus instead on enabling that empowerment; providing access to new areas that allows the consumer to direct their individual shopping process and making product and information always available, anywhere and at speed. Secondly, consumer demand for the provision of commerce anywhere means harmonising interactions across systems and platforms to align retail touch points. Managing the evolving retail environment means investing wisely in technology that accommodates and connects a customer journey, enabling an individual to engage with you at the touch point that is most appropriate and convenient for them. As part of this, retailers must commit to investing in their retail operations, and in particular, their stores and transforming them into retail hubs that not only support local communities but enhance shoppers’ lives through a number of value-add INCREASINGTHE VALUE OFTHE STORE: WILL CONSUMERS BUY DIRECT FROM A BRAND IFTHEY HAVE NEVER SEENTHE ITEM IN A BRICKS AND MORTAR STORE? 40%60%
  • Page 12 services and activities. The store offers a crucial differentiator against the continued expansion of the global market place and development of manufacturers’ direct to consumer offers. Of course, a key component of the store is its people and our findings emphasise the need to empower them with contextual knowledge to drive more positive interactions. Although each interaction should be primarily consumer-led, retail assistants provide the human engagement with your business. To do this most successfully, they need to be empowered to effectively respond and manage any interaction, regardless of the purchase path that consumer has chosen, delivering an outcome that is more productive and positive than it would be without their involvement. Done right this personal interaction can improve brand affinity and value. Finally, it is time to revise the perception of personalisation and replace it with the concept of individualisation. The latter places the consumer firmly in control of their retail process and the information they are willing to share with retailers. The task for retailers is to utilise every touch point to validate an authentic and appropriate interaction. Loyalty is not purely driven by rewards anymore and there is no room for misunderstanding the importance of the fundamental drivers. These fundamentals are now access anywhere and availability always and there is a new sophistication required to meet those fundamentals. Access = knowledge and participation = individual retail for today’s consumer. METHODOLOGY Responses to the New Retail Democracy research were generated from 4,500 male and female adult consumers. The survey was conducted by Redshift Research in November 2013 using its online consumer panel. The study compiled responses from 500 consumers each from Brazil, China, France, Germany, Japan, Russia, South Korea, the UK and USA.